Tuesday, June 26, 2012

I remember that I involuntarily screamed and spasmodically clutched my chest in some kind of sudden cardiac event when I learned to my horror that the evil Federal Reserve has announced a continuation of their insane money-creation schemes for another year at least.

This is supposed to keep interest rates low by flooding the bond market with oceans of new money to drive bond prices up (and hence yields down).
But the low interest rates will also, theoretically, encourage the stock market to go up, which is actually the whole point of it all.

This, unfortunately, was made necessary by the sheer staggering stupidity of everyone investing everything, including their entire future lives, in the stock market.

Indeed, as Dave Gonigam in Agora Financial's 5- Minute Forecast said, "stock prices are what it’s all about for the Fed", and then quoting Ben Bernanke saying that a rising stock market "will boost consumer wealth and help increase confidence, which can also spur spending."

I am, predictably, outraged! Outraged, I tells ya! I mean, if I pay $10 to buy a share of a company which makes $1 in earnings, but I am richer if strangers in a rigged market bid the stock up to $100, to buy the same $1 of earnings? Hahahaha!

I don't know why I am laughing, because on top of all my other repressed and expressed angers about all kinds of outrageous things, I am outraged anew that most of the money, created by the evil Federal Reserve out of thin air, which increases the money supply which increases prices which hurts the poor, was used to buy new government debt! Gahhhh!

Monetizing the debt is the Number One Unforgivable Sin Of Economics (NOUSOE) across the entire universe. And if this kind of monumental, abject stupidity gets back to Zorggk, Supreme Commander of this whole quadrant of the galaxy, who thinks that Earthlings (which my people call "Maize people") are an irredeemably stupid species deserving of immediate extinction, we're probably toast!

Part of it all, he is sure to find out, is caused by the gaping current account deficit (essentially the trade deficit), which is still falling, faster and faster, down to around $470 billion a year.

This is money that is, theoretically, lost when imports exceed exports. Poof! Gone! Slipped from hands of Americans and into the hands of foreigners, but, I hasten to add, with cross-border ownerships, taxes, tariffs, fees, bribes, tax-evading shenanigans, government corruption and incessant meddling, who the hell knows what a "current-account deficit" really is anymore?

Plus (and this is the biggie reason why I am so apprehensive), Zorggk himself, for amusement and with a gluttonous appetite for money and profit, is betting on a rise in gold and silver here on Earth (which my people call "Maize"), which, unfortunately, haven't done much, investment-wise, in quite a while.

So he is especially peevish about not getting the expected double-digit increases from his investments in gold and silver, despite my telling him that it would be the Best Can't-Lose Investment Idea You Ever Heard (BC-LIIYEH).

To be fair, this is the same thing that I told my family, any friends I once had, and the people who said they were my friends but just wanted me to give them money and/or stab me in the back the first chance they got, the bastards.

"Buy gold, silver and oil!" I told them, and when they didn't listen, I told their children that their parents were stupid for not buying gold, silver and oil, and I told them all some more, and then more, and more, until they screamed "Enough about buying gold, silver and oil! We have heard it, and we have had it with hearing you say it, you creepy, horrible old man! And get out of our damned way so that we can get to the produce section and get some damned lettuce and a couple of spuds so that I can get out of this stupid grocery store and away from you!"

And, since we are talking about it, I also told YOU to buy gold, silver and oil, and I also told total strangers and anyone who lets me get near enough to them, usually by sneaking up on them from the rear, to unforgettably-scream at them "We're freaking doomed, you moron! Buy gold, silver and oil against the calamitous inflation in prices, the inevitable result of an unholy, un-Constitutional treachery of a fiat currency un-tethered to gold, insane levels of fractional-reserve banking where hundreds of dollars are created out of thin air for every measly penny of new deposits, a national debt more than equal to GDP ($15 trillion), with a staggering accrued liability measured in hundreds of trillions of dollars, a huge suffocating government running amok on monstrous deficit-spending, and the foul, filthy Federal Reserve creating outrageous amounts of money to pay for it all!"

To those who turned and replied, in their usual blubbering incomprehension, saying "Shut the hell up, you moron!" or "Oh, damn! Not you again!", I haughtily dismissed them with a mere wave of my insouciant hand -- away with thee, poltroon! -- as if brushing an insignificant bug from the table.

On the other hand, there were those who where quizzical, along the lines of "What in the hell are you yelling about, you stupid old man who ought to be forced to take some kind of brain medicine, or locked up, or shot?"

To these people I eagerly explained, as gently and kindly as I could, "Ha! That just shows how stupid you are, lard butt! Such insane levels of money inflation must always -- always, you hear me, you moron? Always! -- lead to price a destructive inflation, as evidenced by the fact that, for the last 4,500 years, inflation in the money supply has ALWAYS led to inflation in prices! What are you, some kind of drooling 'free lunch' moron or Democrat, as redundant as that is?"

Usually, the conversation, as fascinating as it is, ends abruptly pretty soon after that. So I never got the chance to tell anyone that, currently, inflation is readily seen in the prices of bonds, their derivatives, the things tenuously tied to the bond market through other derivatives, and things I about which I have probably never even heard.

In fact, the long inflation in the money supply has already shown up in the prices of bonds, as tons of new money allows bidding for them so frenzied that it has driven bond prices to the moon and thus caused short-term interest rates to drop to -- literally! --zero!

Buying a bond that pays literally zero! Wow! And on short-term paper, yield is less than 2% on the 10-year note!

And this is despite the fact that price inflation, figured the old-fashioned, pre-Clinton, pre-Greenspan, pre-Boskin deception-and-fraud kind of way, is somewhere between a horrifying 8% and a stupefying 11%! Terrifying! We're Freaking Doomed (WFD)!

It seems to me that around in here, somewhere, that instead of screaming "We're freaking doomed because of the evil Federal Reserve creating so much credit/debt and money, and the despicably corrupt Congress that encouraged them to do it," I should instead make another suggestion that you, too, adopt the Best Can't-Lose Investment Idea You Ever Heard (BC-LIIYEH), which is to buy gold, silver and oil to save yourself (and theoretically prosper beyond dreams of avarice!) from the coming, inevitable, roaring inflation in prices of food and energy that you need to exist, and the devastating deflation in the prices of the things you don't need to exist.

And if you do it soon enough, and the prices of gold and silver go up far enough as a result, I can thankfully, in a saving-my-own-butt kind of way, show Zorggk a smaller loss in his holdings of gold and silver, and indeed show him a very encouraging meteoric rising trend in their prices sooner rather than later!

And this silly reacting-to-volatility is ignoring the dead-bang certainty of it all, which makes buying gold, silver and oil, truly, the Best Can't-Lose Investment Idea You Ever Heard (BC-LIIYEH).

Monday, June 18, 2012

I am dreading that it is now again time for me to make another of my stupid periodic reports to Zorggk The Exceedingly Great, who is the new Supreme Overlord of this barren outpost in this quadrant of the galaxy, and who isn't happy about it.

I mean, if he is so exceedingly great, what is he doing way out here, out across the tracks, in this backwater, low-rent, low-IQ section of the universe?

And his famously bad mood about his new position is only one of the things that make this reporting period so forbidding to me.

For one thing, he thinks that our beer tastes "funny" and that our pornography is weird, involving, as it does, a total absence of bare, glistening tentacles, particularly long, shapely tentacles heaving and breathing lustily in raw, feverish passion, twining and intertwining in a forbidden dance of love, and together (for Zorggk, anyway) they count as Strike One and Strike Two against this stupid planet, as seemingly unfair as that is.

Rumor has it that Zorggk is considering just eliminating our whole planet because we are 1) now sending our low-IQ, mutant spoor into space aboard probes (a term which he thinks is riotously funny, as in "Bend over, here come the probes!" Hahaha!), but which is bad because 2) he is seriously probe-o-phobic.

No, in rereading that last sentence, I now see that the "2)" is not right, although if you have ever pondered the many meanings of the word "probe", you will understand how anyone would think it was number 2! Get it? Hahaha!

Now that I am embarrassed to see that my little joke has fallen short, let me blithely go on as if nothing has happened, where I breezily announce that the REAL 2) reason to kill us all is because we Earthlings, whom my people call "Maize," are a really stupid bunch of lowlife boneheads such that we cannot even understand the all-important importance of not having inflation in consumer prices, as emphatically implied by a ridiculously redundant -- plus stupid-sounding at no extra cost! -- phrase, namely "all-important importance."

In my initial briefing with Zorggk, which I remember with a shudder to this day, I was to bring him up to speed about this planet you call Earth, which my people call "Maize."

Eagerly, like the cowardly servile little worm that I am, I agreed with him about how he deserved a better posting than this, and that it's all politics, especially that whole Andromeda crowd that thinks it's so hot, but are not, but they got the power, that's what..The little rap tune broke the ice, and we soon shared a laugh about the stupidity of not having a stable money supply, as achieved with gold as money, and I was starting to tell him about the bizarre fascination on the planet Maize, which you call Earth, with, instead of a gold money, ridiculous paper currencies! Hahaha!

He laughed, but it was not mirthful. It was cold and heartless, as he, too, knew what this meant.

But he roared, or perhaps guffawed, we don't know which, when I described the insane levels of fractional-reserve banking, where the banks have a few lousy cents in deposits for every few THOUSANDS of dollars that they created, literally out of thin air, so that the banks could lend it out in some gigantic flood of new money, and new credit, and new debt, of which a staggering $6.3 trillion was used to buy government debt so that the hopelessly embarrassing Obama administration could deficit-spend it -- the whole $6.3 trillion! -- in basically Three Lousy Years (TLY)!

Doubling the entire national debt in less than 4 years! Insane and suicidal!

Even the Glorb people, a newly-discovered kind of invertebrate slug on the planet Glorb, which my people call "Maize" and which is even farther out in the barren hinterlands of the galaxy, understand this gold/money concept completely, despite not having any discernable brain, and have a monetary system is a gold standard!

Even though there is no actual gold on the planet!

I mean, how weird is that?

The lesson is that inflation in prices, as a result of such massive increases in the money supply by both the evil Federal Reserve and the other dirtbag central banks around the world because they are not constrained by gold, is going to have a profound effect.

"What kind of effect?" you ask with a quiver in your voice. Well, I am happy to say that we professional economists have a technical, very-precise term for what happened every time in the last 4,500 years that this kind of monetary insanity got out of control.

We call it Everything Goes To Hell (EGTH).

One of the more interesting details of studying the historical evidence of EGTH is that not quite everything goes to, you know, hell.

Gold and silver soar, soar, SOAR in price, and thus the Gigantic Mogambo Revelation (GMR), enlightenment perhaps not unlike that found by a young Buddha under a bodhi tree, which is that gold and silver will, this time, just like all the other times, soar in price.

And thus (follow my logic closely here) those who wisely bought gold and silver (and oil) will be an exclusive club, namely the "new rich," where "rich" is defined as "The sheer tonnage of cool stuff and tasty treats you bought and the additional tonnage of stuff you can still easily afford to buy."

Ah, but the delight of the prosperous few will be more than matched by the desperate, fearful outrage of the many, who are looking for scapegoats.

In that case, let me offer that it was all made possible by the evil Federal Reserve actually creating the fiat money, an evil Supreme Court that treacherously ruled that a fiat money was the same as a gold money despite what the Constitution said, a long series of corrupt, low-IQ Congresses that encouraged disastrous monetary profligacy so as to continually fund outrageous budget deficits, a woefully-ignorant and/or mentally-defective economics profession shot-through with the now-proven idiocies of Keynesian econometric economics, the one that actually links interest rates with spending and prescribes deficit-spending regardless of size, and a brain-dead population of voters that kept electing the same "Who else wants a free lunch?" weenies, time after time, all these years since the '60s.

A pox upon all their houses, of course, but the point is that, as they say, "It is an ill wind that doesn't blow somebody some good."

In this case, it is the wise, intelligent, good-looking, cool people who bought gold, silver and oil stocks who will be blown some good.

And since physical gold and physical silver are still so amazingly cheap and so easy to buy, and the result being so obviously guaranteed by 4,500 years of history, what can one say except, gleefully, "Whee! This investing stuff is easy!"?

Monday, June 11, 2012

I was, admittedly, drinking heavily,
courageously trying to get drunk enough so that 1) I would have a handy excuse
for being so incoherent and belligerent, and 2) I would not have to think about
the inflationary horrors in prices that will be the ruinous price we pay for
the inflationary horrors in the exploding money supply thanks to the treachery
and stupidity of the Federal Reserve and the loathsome Obama administration.

Unfortunately,
at this particular point in time I was neither of the above, although naturally
still blathering in my customary rage.But
I was now at the point where I sigh aloud through gritted teeth, asking
rhetorically "And who committed these terrible monetary and fiscal sins,
and thus condemned us and our children to the hell of complete ruination? To
quote Captain Ahab in Moby Dick, 'from the heart of hell I strike at thee!'
Hahahaha!"

As if
on cue, here comes my idiot son bursting into the room, excitedly exclaiming
that his many IOUs to me are as good as paid!"Huh?" I think to
myself, wondering if he finally got a job, or was I too sloshed to comprehend
what he is saying?

So,
through numb lips I managed to ask, "Did you get a job or something, or
have some other way to pay me back all the money you owe me, or at least pour
me another drink, you lazy little bastard? Or even get your damned mother off
my ass about taking the garbage out for a lousy ten minutes?"

He says
no, he did not get a job, adding that he is sick of hearing me ask about it, and
helpfully pointing out that I was slobbering down the front of my shirt.

Well, I
looked down at my shirt, and it was, alas, messy with slobber. Reflexively, I cleverly
denied the facts and said "I am not drooling.I deliberately put that slobber there
because…because…because…"

Realizing
that I could not come up with some vaguely logical reason why I was dribbling
on my own shirt, I groggily switched tacks and asked, with a snotty, arrogant
attitude, "How is it that a busted-out kid like you can pay off his IOUs
to me, his loving father who sees treachery everywhere, even in the bosom of
his devoted family?"

I subtly
arched an eyebrow to show that, as a loving father, I am curious as to how he
has arranged such a wondrous thing.

In
reply, he thrusts a copy of the Tampa Bay Times, my local laughably provincial
leftist rag, which (as you would expect) carried an essay by Paul Krugman, a
man whom I consider, with a particularly acid venom, one of the worst
neo-Keynesian econometric halfwits in the known world, the shame of Princeton
University, a shame he shares with Ben Bernanke, chairman of the loathsome,
demonic Federal Reserve.

Well,
my eyes were kind of going in-and-out of focus by this time, but the adrenaline
of my outrage soon focused my attention wonderfully when he demonstrated his
insanity by pontificating that, even though it has been discredited for so long
that it is beyond incredible that he would dare say it, "Our debt is
mostly money we owe to each other."

At this
enormous, enormous stupidity I felt a huge Mogambo Laugh Of Scorn (MLOS)
building inside me, which I labored mightily to suppress long enough to gently
and kindly ask my darling son, as the gentle and kindly father that I really,
really am, "What in the hell does that have to do with your owing me far more
money than you will ever be worth, you little moron?"

He gleefully
explained "Well, I owe you money, see, but Mr. Krugman says we all owe
money to each other, and you'll get yours back somehow, like when you enjoy the
utility of new bridges and roads, and keeping the welfare population docile, and
having a massive military and an enormous government workforce looking for
something to do."

My
stunned silence apparently emboldened him to continue "Or probably more
directly when I am older and paying Social Security taxes to support you in
your geezerhood.So Krugman was right;
it's money we owe to each other! So it all cancels out! We're even, dude!"

At
this, the long-suppressed MLOS burst forth from my lips, my bad breath tinged
with sour tequila and old pizza, the stench of which made me realize where he
got such a ridiculous idea; he hangs around Democrats and similarly brain-damaged
kids at school.

So I
gave him a scornful, disdainful look, pointed to the door, let out a loud belch
and then an even louder fart as my Clever Mogambo Way (CMW) of wordlessly
dismissing him and his stupid ideas from my royal presence.

As for Paul
Krugman, I forced myself to read further in his stupid essay to see if he has,
by some absolute miracle, showed that the national debt really IS a lot of "money
we owe to each other", and not some deadly generator of horrific economy-killing
inflation in prices like has always been the case.

I have
more than an academic interest in this, as I, a taxpayer, have been paying and
paying and paying taxes to pay the interest on the constantly-growing debt (now
grown to a staggering $16 trillion) all my life, and paying the
constantly-higher inflation in prices that one sadly gets as a result of
creating so much excess money and credit, too, paying more and more Every
Freaking Day (EFD).

And now
I'd really, really, REALLY like someone to pay ME for a change, which you would
expect from something termed "money we owe each other" and, even if
unmentioned, paying me back the excess money I had to spend all along the way to
pay the inflation in prices that all that excess money and credit produced,
too, which is now (hold onto your hat!) running at and unaltered 8% or so, by
which I mean "or more!"

Gaaaah! We're Freaking Doomed (WFD)!

Alas,
like all know-nothing blowhards, Krugman does not explain how he reached his
preposterous conclusion, and that we'll just have to take his word on it, even
though he has been wrong about almost everything all his life, except his
remark about "Mogambo? Sure I know him! An incandescent brilliance! He's a
Big Freaking Genius (BFG) who sees right through me, exposing me as the vacuous
gasbag that I am!"

Okay, I
admit that he never actually said that, and I just made it up because that is
just the kind of petty, spiteful, hateful kind of guy that I am, which I have already
been told is not as charming as I had always thought, so to hell with all of
you.

Anyway,
the point of all of this is not that kids want something for nothing, or that
the inmates are running the mental asylum, but that 4,500 years of history says
to buy gold and silver when it gets to this point, to which I add "and oil
stocks."

And you
don't have to believe me just because I'm an arrogant bastard who thinks he is
some kind of genius or something. No,
sir!You can but listen to the dulcet
tones of any Junior Mogambo Ranger (JMR) -- intelligent people all! -- who will
likewise tell you to buy gold, silver and oil stocks, too! It's freaking unanimous!

And if
you are (be honest!) a lazy bastard like me, then you will appreciate the utter
simplicity with which investment decisions are made when it merely boils down
to "How much physical gold, physical silver and/or oil stocks should I buy
today so that I will be wealthy in the future when this whole stinking,
fraudulent, bloated, cancerous fiat-money crap goes bust in some horrific
inflationary calamity, as it must because it always has, as so confidently and
arrogantly argued by the petty, spiteful, hateful -- yet charming! -- Magnificent
Mojo Mogambo (MMM)?"

Then
you will, as I do, and as Junior Mogambo Rangers (JMRs) around the world do,
and as everyone in this whole freaking quadrant of the galaxy do does do, too, do,
gleefully say to yourself "Whee! This investing stuff is easy!"

If you
are a JMR, then you noticed the code words "do does do, too, do."
Now, get out your Mogambo Decoder Ring (MDR) and decipher the hidden message,
which is "Buy gold, silver and oil."

If you
are a JMR, then you already know that the secret message, "But gold,
silver and oil", is always the same secret message.This is because while the advice itself is
brilliant, there is no such thing as a Mogambo Decoder Ring (MDR), so you
couldn't decipher anything anyway.

So, if
you have sent you money for, but not received, an MDR, be advised that the
whole thing is a big rip-off, and you will never get your money back because
that is just the petty, spiteful, hateful kind of guy that I am, but who is charming
as all hell.

But you
will wax wealthy from buying gold, silver and oil, which will more than make up
for, you know, the ring rip-off thing.

And if
you have NOT ordered a Mogambo Decoder Ring (MDR), then simply send $500, cash,
in un-marked, non-sequential bills, in a plain envelope addressed to "Occupant",
and then just wait!

In the
meantime, don't forget buying the aforementioned gold, silver and oil, as "Whee!
This investing stuff is easy!"

About Me

The Mogambo Guru
Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning , and other fine publications. For podcasts featuring the Mogambo.